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Centralisation and
Decentralisation
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Centralisation
Centralisation is the systematic and consistent reservationof authority at central points within the organisation.
In centralisation, little delegation of authority is the
rule.
Power and discretion are concentrated at the top levels.
Control and decision making reside at the top levels of
the management.
Absolute centralisation is untenable because it meanthat subordinates have no duties, power, or authority.
Most organisation start with centralisation of authority
initially.
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Centralisation
There are certain special circumstances forcingmanagers to reserve authority and centralise
decision making power.
To facilitate personal leadership.
To provide for integration.
To handle emergencies
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CentralisationAdvantages : There is uniformed decision making
Duplication of effort is eliminated
Highly skilled personnel are available to the whole
organisation and not just the one unit;
Greater control; Economies in staffing;
Economies of Scale e.g. negotiation of better rates
for office supplies etc.,
Easier communication.
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Centralisation
Disadvantages The organisation is bureaucratic;
Power is concentrated within the upper
management levels with key decisions takenby a few top managers;
Rigidity;
Delays in decision making; Interrupt personal development
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Decentralisation Decentralisation is where the authority and
power of decision making is given to the lowerlevels of the organisation except that which can
be exercised at central points.
Absolute decentralisation if fictitious in practice,degree of decentralisation vary organisation to
organisation.
Types of Decentralisation
Profit centres/ Responsibility centre:
Cost/Expense Centres
Investment Centres
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Decentralisation
Decentralisation: Advantages Lower levels of management will have the power to
make decisions;
The decisions are made by people who know and
understand situation;
There is recognition of local conditions;
The increased power gives improved morale;
There is personal development due to he increasedresponsibility;
The organisation is more responsive to the environment
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Decentralisation
Decentralisation: Disadvantages There is a lack of uniformity of decision making.
People have different views and so individuality may
affect those decisions made.
Inter-unit conflict may arise.
Managers may not be willing to accept responsibility.
There is a loss of control at the top of the organisation
structure.
Loss of some economies of scale.
Development of a narrow departmental view.
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Motivation
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Motivation
According to Scott Motivation is a process of stimulating
people to action to accomplish desired goals. In other
words it is the set of forces that cause people to behave in
certain ways.
Motivation Process ( Generalised Model)
Need
(deficiency)
Behaviour
Work hard
Find another job
Become union member
and pressure
management
Goal
Get a pay
raise
Tension Reduction
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Importance of Motivation
Productive use of resources Increased efficiency and output
Achievement of goals
Development of friendly relationships
Stability in workforce
Determinants of Motivation
The Individual
The organisation
The environment
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The Need Hierarchy Approach
(Maslow)Essential components of the theory
Adult motives are complex: No single motive determinesbehaviour, rather a number of motives operate at the same time.
Needs form a hierarchy: lower level needs must at leastpartly be satisfied before higher level needs emerge
A satisfied need is not a motivator:
There is a distinction between needs: higher level needs
can be satisfied in many more ways than the lower level needs.
People seek growth: They want to move up the hierarchy
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The Need Hierarchy Approach
(Maslow) People must, in a hierarchical order, satisfy five needs:
Physiological needs for basic survival and biological function.
Security needs for a safe physical and emotional environment.
Belongingness needs for love and affection.
Esteem needs for positive self-image/self-respect and recognition and
respect from others.
Self-actualization needs for realizing ones potential for personal
growth and development.
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Maslows Hierarchy of Needs
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The Need Hierarchy Approach
Weaknesses of Maslows theory
Five levels of need are not always present.
Ordering or importance of needs is not always thesame.
Cultural differences in categories and hierarchies.
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The Two-Factor Theory (Herzberg)
Peoples satisfaction and dissatisfaction areinfluenced by two independent sets of factors
motivation factors and hygiene factors.
Theory assumes that job satisfaction and job
dissatisfaction are on two distinct continuums:
Motivational factors (work content) are on a
continuum that ranges from satisfaction to no
satisfaction.
Hygiene factors (work environment) are on a
separate continuum that ranges from
dissatisfaction to no dissatisfaction.
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The Two Factor Theory of Motivation
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The Two-Factor Theory (Herzberg) Motivation is a two-stage process:
Ensuring that the hygiene factors are not deficientand not blocking motivation.
Providing employees the opportunity to
experience increase motivational factors through
the use of job enrichment and the redesign of
jobs.
Criticisms of the Two-Factor Theory
Interview findings are subject to differentexplanations.
Sample population was not representative.
Subsequent research has not upheld theory.
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Alderfers ERG TheoryNeed Level Description
Growth Needs
(Esteem, self- actualisation
needs)
Needs for self-development
and productive work
Relatedness Needs
(Social needs)
Needs to have good
interpersonal relations
Existence Needs
( physiological safety)
Basic needs for human
survival
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ERG Theory
In this theory Alderfer simplify the Maslows
need priority theory but it also remove therestriction about the activation of needs in any
hierarchical order.
He suggested that more than one need may beoperative or activated at the same point of time.
ERG theory provides a specific mechanism for
downward movement in the hierarchy.
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Dislike work will avoid it
Must be coerced, controlled,
directed, or threatened with
punishment
Prefer direction, avoid
responsibility, little ambition,
want security
Do not dislike work
Self direction and self control
Seek responsibility
Imagination, creativity widely
distributed
Intellectual potential only
partially utilized
Douglas McGregor Theory X & YDouglas McGregor Theory X & Y
Theory X Assumptions
Theory Y Assumptions
1906-1964
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Douglas McGregor Theory X & Y
Few companies today stilluse Theory X
Many are trying Theory Ytechniques
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McGregors ApproachTheory X Theory Y
1) Production centered 1) Employee centered
2) Autocratic 2) Democratic
3) External control 3) Internal control4) Closer supervision 4) General supervision
5) Initiating structure 5) Consideration
6) Directive 6) Supportive
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